Acquisitions lead SeaChange's 2Q revenues
Video-on-demand vendor SeaChange International posted improved second quarter earnings yesterday, but didn't forecast a rosy outlook for upcoming quarters.
Led by recent acquisitions, SeaChange's second quarter revenues were $51.6 million, which was 11 percent higher than the total revenues of $46.5 million for the same quarter a year ago. Thomson Reuters analysts came in with an average estimate of $54 million for SeaChange
SeaChange earned $3.5 million, or 11 cents a share, for the second quarter that ended July 31, compared to a loss of $376,000, or 1 cent per share a year ago.
Total revenues in the second quarter of fiscal 2011 from the company's software segment were $34.2 million, which was $4.1 million or 14 percent higher than comparable revenue in the fiscal second quarter of last year.
The bulk of the year over year increase in software revenue was attributable to the acquisitions of eventIS, which was completed in the fiscal third quarter of last year, and VividLogic, which was completed in this year's fiscal first quarter. Higher VOD software maintenance also helped the software segment increase its revenue.
The servers and storage division generated $10.3 million in revenue for the second quarter of fiscal 2011, which was $1.5 million lower than revenue for the second quarter of fiscal 2010.
SeaChange said the decrease in revenue was due primarily to lower VOD server shipments to North American and Latin American service providers offset partially by a large Broadcast server order shipped in a previous quarter and accepted by the customer in the 2011 fiscal second quarter.
"I'm encouraged by the software market," said SeaChange CEO and chairman Bill Styslinger. "We signed two long term master purchase agreements, the first being the largest in the history of SeaChange. The other is a significant advertising deal with a major U.S. telco. We're continuing to work through the transition issues from being a hardware company to a software company.
"Specifically, we're working through restructuring our customer agreements so we can align revenue more with costs, especially for our newly acquired companies, and we are working on transitioning more custom work to licensed software and charging appropriately for custom work."
SeaChange revised its fiscal full year non-GAAP revenue guidance to $215 to $220 million from $225 million to $235 million. SeaChange is projecting fiscal third quarter non-GAAP revenue in the range of $50 million to $53 million after previously expecting $59 million.
Earlier this year, SeaChange announced that president and COO Ed Dunbar had left the company and was replaces as president by Yvette Kanouff.